The government on Friday told the Supreme Court it wanted to be involved in the dispute between Reliance Industries (RIL) and Reliance Natural Resources (RNRL) on the price of natural gas to be supplied from India?s largest gas find.

The petroleum ministry moved an affidavit in the apex court in response to a petition filed by RIL to become a party to the dispute. The ministry?s move is in line with the statement made by minister Murli Deora that gas from the offshore Krishna-Godavari basin is a national resource and so by implication the government has a justifiable stake in its pricing.

RIL, too, filed an affidavit in the court on Friday stating that it did not have ?any unfettered rights? in the quantity and price of gas and, hence, will not be able to supply the gas to RNRL without the consent of the government.

The Bombay High Court on June 15 asked RIL to supply 28 mmscmd of K-G D6 gas to RNRL for 17 years at $2.34 per million British thermal units. Both RIL and RNRL have filed separate special leave petitions against the Bombay High Court order in the Supreme Court.

The government has, in its affidavit, argued that the high court decision would lead to fixation of two prices?one for RNRL and the other for public sector undertakings?for the same gas and ?such an interpretation would be violative of Article 14 of the Constitution of India.? Article 14 provides for equality before law and equal protection. ?The sovereign rights of India could not be subjected to private negotiations by mutual understanding and this is what has precisely happened in the present case, necessitating the filing of the

application?, the government said.Natural gas now comprises about 8% of the total energy-mix in the economy, but as more power, fertiliser and other companies switch to its use, the importance of the fuel will rise sharply.

The ministry has submitted that the gas has to be distributed according to the government?s gas utilisation policy. ?It is not the private property of RIL and RNRL and any understanding arrived at between them is not binding upon the government.?

Rejecting RNRL?s contention that it was entitled to a particular quantity of gas, the affidavit said it was for the government to decide who was entitled to the gas.

The affidavit states: ?Union of India?s interests are vitally involved and affected by the Bombay High Court judgement and considering this fact, it would be more appropriate to make Union of India as a party.?

It further notes that the government?s involvement in the proceedings was aimed at effectively resolving the controversy that has arisen in the matter.

Analysts were not surprised by the government decision to join the case.

A Mumbai-based analyst tracking gas sector said, ?The days of (companies) using political clout to settle business and complex issues are over. From today?s affidavit, it seems the government wants to straighten the matter. The government is quite clear that sovereign interest is important than any settlement between family members.?

Another analyst, who does not want to be named, noted, ?Prima-facie, it?s positive for RIL and not for RNRL. However, we will have to wait and watch for the final judgement of the apex court.?

RIL?s affidavit claims that it was only a contractor and did not have ?any unfettered rights? in the quantity and price of gas. RNRL has contended that RIL was trying to make the dispute as one between it and the government, which., it argued, had no role in the issue.

RNRL?s special leave petition has challenged the high court?s order and has prayed modification in the high court ruling to make it incumbent on RIL to supply gas from K-G basin fields at a price of $2.34 per mmBtu, which is 44% lower than that fixed by the government. RIL?s petition has asked for inclusion of government as a respondent in the dispute.

Earlier, the petroleum ministry had withdrawn its affidavit on December 12, 2008 in the Bombay High Court seeking a third party status in the RIL-RNRL dispute.